China Policy Series, 36. London; New York: Routledge, 2014. xviii, 267 pp. (Figures, tables.) US$155.00, cloth. ISBN 978-0-415-65688-7.
This book explores the role of government policies on China’s industrial growth. It discusses how China’s industrial policies and priorities have evolved, and how they are linked to policies in other areas, such as trade, technology, and regional development. The book consists of three parts. Part 1 discusses China’s industrial policies and industrial development in general. Part 2 provides a group of case studies on the development of China’s mainstay industries, including automobile, telecom equipment, electronic information, and ICT as well as shale gas industries. Part 3 examines China’s regional industrial development and includes studies on China’s Yangtze River Delta Region, Beijing-Tianjin-Hebei Region, the Western Region, and the Central Region.
In part 1, chapter 1 reviews the structural evolution of China’s industrial economy and examines the problems of China’s current development model, including the economy’s over-reliance on investment, processing trade, and low-value-added segments for growth, and insufficient capabilities in R&D, product design, marketing, and brand and supply chain management. It provides policy suggestions for industrial restructuring during the 12th Five-Year Plan Period. Chapter 2 reviews the policy evolution of China’s regional economic development since 1949. It illustrates how different patterns of regional development emerge as the state’s policy priorities change and how the tensions between central and local government shape regional development policies. Chapter 3 examines the evolving framework and key trends of China’s innovation policies. It identifies several distinct characteristics of China’s innovation policies, including the aim to nurture globally competitive enterprises with strong innovation capacity, the comprehensive resource allocation approach, and the synergetic feature of involving various government agencies. Chapter 4 examines China’s recent R&D intensification and the role of the state. Based on both aggregate and firm-level data, it shows that Chinese state-owned enterprises are responsible for a disproportionate share of industry R&D. Its empirical investigation suggests China’s state-owned enterprises have lower threshold return of R&D and their R&D generates small technology spillover effects. Chapter 5 examines the relations between openness, productivity, and economic growth in China. It shows that openness in general has a positive impact on productivity performance in China’s regional economies and there is evidence to show that openness brings about competition and lowers the overall profit margins in China’s manufacturing sector.
Part 2 provides a set of case studies that examines the development of China’s pillar industries and emerging strategic industries. Chapter 6 examines the proliferation of automobile producers in China. It shows that China’s automobile industry has both rampant exits and entries. China’s industrial policy has failed to consolidate the automobile sector, the structure of which is likely to remain dispersed in the near future. Chapter 7 examines the technological capability development in China’s telecom equipment industry. It argues that Chinese telecom equipment firms should focus more on developing strong innovation capabilities and core technologies, in addition to developing strong manufacturing capabilities. It also suggests government support is a precondition for the successful adoption of a locally developed technology standard. Chapter 8 analyzes the current environmental challenges faced by China’s electronic information industry. It proposes the use of green information and communications technology (ICT) products as a possible solution and strategy to handle these challenges. It also points out the problems and difficulties facing the Chinese government in the implementation of green ICT regulations. Chapter 9 examines the general features, trends, and challenges of ICT industries’ catching up in China and how to design policies to solve existing problems. It shows that the catch-up of China’s local ICT companies has relatively accelerated after the global financial crisis. It suggests that policy makers can construct new technology standards, develop the Internet of Things (IOT) and encourage local governments to participate in the commercialization of new technologies. Chapter 10 examines the recent shale gas revolution and the policy implications for China. It shows China’s shale gas industry is still in its early stage of development, and is dominated by state-owned enterprises. It argues that the Chinese government should open the shale gas industry to private companies, encourage innovation, and establish a market-oriented price mechanism as well as stronger regulations for environment protection.
Part 3 examines China’s regional industrial development. Chapter 11 examines how the location decisions of transnational corporations and the development of global-local production networks have shaped the industrial development of the Yangtze River Delta region (YRD). It shows that the formation of supply networks and the clustering of ICT firms in YRD have provided opportunities for local sourcing and subcontracting, but the important external inter-firm networks are still limited by foreign invested enterprises themselves. Chapter 12 examines the role of Beijing-Tianjin-Hebei Region (Jing-Jin-Ji) in the transformation of the Chinese economy. It argues that over the recent decades, China’s growth poles have shifted gradually northward and westward, and the Jing-Jin-Ji has great potential to become a growth pole for China’s economy. Chapter 13 examines the achievements and obstacles of China’s western development campaign. It argues that relying solely on transfer payments and the equalization of basic public services is far from enough. The government should combine various fiscal and financial policy tools to promote western development. Chapter 14 analyzes the evolving role of the central provinces in China’s overall development and policy consideration. It argues that moving outward-oriented industries from coastal to central regions enhances the central region’s participation in the new global production configuration, which presents both opportunities and challenges to China’s neighbouring economies.
Combining both sectoral and regional perspectives, this book is a well-organized, important contribution to the studies of China’s economic policies. It provides valuable insights for scholars and policy makers to comprehend the evolving nature of China’s industrial policies.
Chen Li
The Chinese University of Hong Kong, Hong Kong, SAR, China
pp. 868-870